Within the credit report it gives details of all your credit agreements, including credit cards, loans and mortgages.

It also includes details on what you owe on your utility, mobile phone and shopping catalogue accounts.

When you apply for new credit, perhaps a loan or a new credit card, the provider will do a credit check on you. This will give them a credit score which allows them to determine how credit worthy you are – for example, how likely are you to be able to make repayments on time?

If you have a bad credit score then a lender is more likely to reject your application for credit or at best offer you a high rate of interest.

What can cause a bad credit history?

There are numerous things that can contribute to a bad credit history, including

Defaulting on payments or making them late

Getting behind with debt repayments

Having CCJs, county court judgements, against you

Applying for a lot of credit in a short space of time

Having recently been rejected for credit

So how can you improve your credit rating?

There are a number of ways.

Firstly by checking your credit report you can clearly see what a prospective lender will see so you know what you’re up against.

There are a number of way to improve your credit rating, including

Make sure you keep up with you current credit repayments, including credit cards, loans and mortgage

Make sure you are on the electoral role

Spread out credit applications. If you’re only wanting to check a credit facility out you can get a quotation credit check rather than a credit check itself and this will be shown on your credit report

Cancel any unused credit cards, debts or loans

If you have split up from a partner, don’t get affected by a their credit problems. Write to the credit reference agencies and let them know you are no longer together and ask for a notice of disassociation to be placed on your file.

If you have been rejected for credit, consider why and see if you can work on improving matters before you apply for further credit. This includes sorting out any errors.

Critically, by checking your credit report regularly you can see how your credit score is improving.